In Data Centralization the Governance, Risk, and Management in business is always at the priority level. The businesses are trying hard to keep their data with maximum security. Therefore, the prices and complexity of compliances have increased rapidly. As the organizations are keeping pace with the changing technology and plug the gap in the existing process. One of the first consideration in the conversion of Centralized operating model is the decision over “Shift and Lift” and Vice-Versa.
“Shift and Lift” is the procedure of exchanging the existing processes, activities, reporting, technologies, etc. with the technologies which currently in use perform and to standardize the existing process with the new operating technologies over time. ‘OR’
“Lift and Shift” is the procedure of shifting towards the new technologies, operative center. The organization standardizes the processes, activities, technologies, reporting etc. so that new way of working can be applied from day one in the whole organization.
Each model has its positive as well as negative effects too, therefore the operating models must be aligned with organizational strategy. So, there is the number of key aspects needs to be considered by an organization while accessing the right operating model for risk, control, and compliance. As well as, the organization has been very specific or choosey about sharing any confidential data with a third-party vendor. While sharing any data, a strategical team needs to be divided between onshore and offshore centers. Low risk and Documentation based sub process can be handled by offshore teams; whereas, the front-end risk, control, and compliance roles can be handled by onshore teams. While choosing the appropriate operating model the following key factors need to consider first.
1. Cost: There are many costs concerned issued needs to be managed first. The setting up of new Operating Model must be compared with the cost of transitioning to an outsourced vendor. The expenses can increase with poor work delivery, performance, and particularly in an outsourced setup. It also adds the technology and infrastructure costs while transitioning of the setup.
2. Market Stability: The location of the organization should be appropriate, not the politically unstable or exposed to significant market or currency risk.
3. The Vulnerability of Process: It is very important to identify first that the process can be transitioned, or can be outsourced from the third-party or the vendor. As well as, the organization needs to exactly identify the requirement, clarity over the adoption of the centralized operating model, process-specific risk dynamics must be evaluated to find that the transition will not affect the delivery of the services due to cost or other associated benefits.
4. Availability of Talent: The selection of an appropriate location for the new operating center has a significant impact on the all available commercial viability of the complete model. Selection of appropriate location with a pool of available talent is very critical, as well as it also requires appropriate language skills.
5. Continuous Monitoring: The change in the operating model requires continuous monitoring and educating people about the workflow. Proper monitoring will allow tracking the minimum changes appears in the market, which might be dangerous for the organization in the future. Due to this, the central team can then investigate all these changes quickly and recommend action following the agreed standard procedure.
6. Actions over Reporting: One of the biggest challenges in the organization is converting the results into action. It is not just good enough to automate the process against the background of poor process or culture. Risk and compliance have always been very vulnerable for people to attain the targets under pressure. So, partially transferring power to the team of people who are entirely focused on ensuring good governance will be a good call.